New Law Will Improve Foreclosure Process in Maine

April 10, 2014

AUGUSTA, ME) Maine Attorney General Janet T. Mills applauds the enactment of Maine?s new law to improve the foreclosure process in Maine.

Two years after the National Mortgage Settlement and five years after enactment of Maine?s Foreclosure Diversion Program, Attorney General Mills spearheaded a study of the State?s efforts to handle residential foreclosures. The Attorney General drafted the legislation after she conducted a six-month long examination of the home foreclosure process, holding two public forums and meeting with dozens of bankers, mediators, housing counselors, judicial personnel, attorneys and other stakeholders.

Following this work, Attorney General Mills submitted a report to the Judiciary Committee. The resulting bill, L.D. 1389, sponsored by Rep. Jarrod Crockett, was amended in part and received unanimous approval from the Judiciary Committee this spring. The Governor signed the bill into law earlier this week.

?The data we collected shows that the housing crisis is still rippling through Maine. Maine courts saw 4,756 foreclosure filings in 2013, up from 4,339 the year before. Our state has still not recovered from the recession. Maine families and communities continue to suffer,? said Attorney General Mills. ?Many people in Maine are still struggling to make ends meet. My work in this area reinforces that we need a legal framework that works efficiently but is responsive to the individual needs and interests of homeowners.?

Mills? report concluded that the foreclosure mediation process, enacted in law in 2009 and adopted by court rule that same year, is successful and should be improved.

The legislation will: ? Strengthen the role of mediation by incorporating the National Mortgage Settlement standards. ? Establish an expedited procedure to deal with abandoned properties. ? Shorten the challenge period from the current 15 years to 5 years for property subject to municipal tax liens recorded after October 13, 2014. ? Authorize the Bureau of Consumer Credit Protection to regulate property preservation entities operating on behalf of lenders. ? Strengthen standards and training for foreclosure mediators. ? Protect funding for housing counselors, a critical part of the foreclosure process, by closing a loophole that allowed foreclosing banks to avoid paying the full real estate transfer tax when the transfer was done with an affiliated entity.

During the First Regular Session of the 126th Legislature the Judiciary Committee reviewed several pieces of legislation regarding the foreclosure process in Maine. Attorney General Mills offered to review the foreclosure process and report back her findings in January 2014. The Attorney General?s Report on the Foreclosure Process in Maine made 18 recommendations, some of which required legislative action. Other measures involved non-legislative action, including promoting foreclosure mediation prior to court action.

Other actions recommended in the Report included seeking increased funding for housing counselors and continued monitoring of the terms of the National Mortgage Settlement by the Attorney General?s Office and an expansion of the Foreclosure Mediation Program by the Judiciary.